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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 3/01/20
- SPI200 (Mar) overnight futures down 4 pts to 6656
- SP500 down 23.00 pts to 3234.85
- NASDAQ down 71.42 pts to 9020.77
- Dow Jones down 233.92 pts to 28,634.88
- FTSE100 up 18.10 pts to 7622.40
- DAX30 down 166.79 pts to 13,219.14
- GOLD futures US Session (Feb Contract) up $24.30 to $1552.40 an ounce
- COPPER futures US Session (Comex Mar) down $0.044 to $2.781 a pound
- OIL futures US Session (Nymex Feb) up $1.87 to $63.05 a barrel
- CRB Index up 1.36 pts to 186.90
- AUDUSD trading at 0.6950
- EURUSD trading at 1.1161
- GBPUSD trading at 1.3087
- USDJPY trading at 108.0900
- USD Index US Session (ICE March) up 0.077 to 96.602
The US markets came under pressure as the threat of a war spooked investors. The major indexes gaped down on the open but managed to fight back and close up off the sessions lows. The killing of the Iranian commander by the US may take heat out of the rally although bulls will be watching to see whether the tension increases over the coming days/weeks. The trade deal between the US and China is set to be signed in Washington on Jan 13th but may take a back seat for now as traders try to assess the fallout from the Iranian airstrikes. Safe haven bonds rallied as the yield on the benchmark 10-year treasury note fell. The DOW closed down 0.81% while the broader SP500 was down 0.71% and the Nasdaq ended down 0.79%. In Europe, Indexes were mixed with the DAX getting hit on the news while the FTSE fought back from a weak open to end with minor gains.
The USD was choppy after the news of the strike although did manage to push higher into the US open before weaker than expected manufacturing data put the brakes on the rally. The EURO came under pressure after the news as the Dollar rallied although price soon bounced back around the start of the US session as the dollar fell. The Euro has started the new year with some weakness so we are now watching to see if buyers can step in to support the pair and build a higher low around 1.1140. The GBP also started the year on the back foot with buyers being defensive as Brexit continues to pressure gains along with recent weaker than expected manufacturing and construction data. Focus for the Pound will be on the ‘transition period’ before the UK leave the EU. The AUD fell after the news with the move continuing already entrenched weakness in the pair. The level to watch now to see if buyers are going to make a stand is around 0.6925. The USDJPY found some safe haven buying to push the currency pair lower. Price bounced off previous lows around 107.900 as sellers locked away some gains. In the near term we expect further pressure as sellers hold lower highs.
Gold rallied hard as safe haven traders jumped into the action with gusto. Traders will now be watching to see how things may escalate between the US and Iran as to whether Gold may have legs and run up to new highs. Price is hovering at previous highs around 1553 so we will not be surprised to see some profit taking from the bulls prior to continuation up. Crude Oil also surged as buyers were pressuring price higher on expectations that supply may be disrupted. Copper came under pressure on the news as price headed south as the USD rallied. A thinner than normal market may have exaggerated the move lower so we will be watching to see how price reacts around the 2.7800 zone.
Cryptocurrencies hold onto recent gains as Bitcoin trades at $7400.4 up 0.40%. Bulls are not out of the woods yet as the longer term pressure is down. Ethereum is also hovering around short term highs and is trading at $135.98 up 1.26% while Ripple is at $0.19522 up 1.28%.
The ASX200 got off to a strong start Friday but faded into the close to end up 42.90 points to 6733.50. Gain in the Energy, Gold and IT sectors helped to push the index higher. Rising stocks outnumbered declining ones by 744 to 353 and 315 ended unchanged.
The ASX200 is expected to open down 10 points as the SPI200 had a choppy European and US session to close out the first Friday of the new year.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Final Manufacturing PMI 11:30am
EUR German Retail Sales 6pm
EUR Final Services PMI 8pm
GBP Final Services PMI 8:30pm
EUR PPI 9pm
USD Final Services PMI 1:45am
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SPI200 INTRADAY LEVELS TO WATCH
ASX200 DAILY CHART AND KEY LEVELS TO WATCH
